By Tony Wang

Every sector, including the nonprofit sector, needs transparency AND a healthy marketplace of ideas to combat corruption and inefficiency; transparency so that we can identify problems sooner and a marketplace of ideas to brainstorm solutions.  But as a myriad of corporate scandals demonstrate, the information marketplace, like any other market, is vulnerable to market failure.  What philanthropy and the nonprofit sector need are better policies to support critical discourse.

What is causing the information market failure?

Take for example the recent Three Cups of Tea scandal. I imagine staff members at Central Asia Institute (CAI) didn’t speak up because they worried how raising a fuss might damage their organization and their individual careers. Additionally, anecdotal evidence suggests several people were aware of the problems at CAI before the 60 Minutes exposé was released. The issue isn’t that we’re unaware of the problems, but rather, people aren’t speaking up.

Although our sector does have its fair share of discussion, I worry about who’s participating. Here on Tactical Philanthropy, for example, the majority of guest posts are authored by consultants and senior executives at foundations.

However, what I find most alarming is the trend of topics discussed here and elsewhere. Consultants and program officers tend to discuss topics like measuring impact, field building, and impact investing because these topics are less likely to offend and are important channels for business development for consultants and help program officers gain visibility for themselves and their foundation. Conversely, more critical and controversial topics like wasteful grants, abuses of power, dysfunctional feedback loops, and poor grantee communication are rarely touched on and do not receive the same level of attention.

In writing this post, I reviewed all 136 guest posts published here on Tactical Philanthropy since 2007. Only five were unequivocally critical of foundations.

(See the spreadsheet I built on Tactical Philanthropy guest posts here. I used my personal judgment to categorize the posts by their degree of criticism.)

In addition to a dearth of financial incentives, there are significant, personal disincentives for critical discourse. If a program officer raises her voice about poor practices in philanthropy, her colleagues will suspect, perhaps correctly, that her opinions draw from her experience at the foundation.

I’m familiar with this issue personally. As a consultant, I became deeply concerned whether current and potential clients frowned upon my blogging and how it affected the reputation of my firm, to the point I abandoned blogging altogether after strong encouragement to do so.

Despite First Amendment protections and the availability of Internet anonymity, feelings of institutional allegiance and desires to avoid conflict, especially with colleagues that we respect and work with every day, cause many of us not to speak up on controversial topics. And because of the unique structure of our sector, where foundations enjoy the power of the purse, criticism of our sector is even harder to come by.

How do we fix our sector’s information marketplace?

A number of actors do play a key role in covering philanthropy’s blind spots. My favorites include academics like Rob Reich and journalists like Stephanie Strom who often play the critic’s role. Philanthropy, in recognition of this issue, even funds watchdog groups like the National Center for Responsive Philanthropy. But all of these actors are external to the organizations that desperately need radical transparency and discourse.

In addition to the critical outsiders, we need the perspectives of critical insiders. We need to support and heed the voice of individuals with critical perspectives, lest philanthropy fall victim to mediocrity.

First, all organizations need to create predefined guidelines on permissible discussion. Instead of a presumption of secrecy that requires an individual to awkwardly ask for permission to express her view, we need a presumption of transparency that shifts the burden to the organization to request individuals not to disclose information and allows an individual to exercise her discretion. Foundations should also provide employees, grantees, and consultants with safeguards to ensure funding is not dependent on an individual’s views.

We also need to openly solicit feedback. Some of the most critical guest posts were in response to the Social Innovation Fund, which actively sought public comment. Sometimes, we also need to solicit feedback in a way that’s anonymous, untraceable, but verified to cover our blind spots. For example, we need forums like TheFunded where grantees are free to criticize foundations in their funding practices and forums that allow program officers to criticize nonprofits and their grant applications, to prevent repeats of Three Cups of Tea. And we need all members of our field, not just senior executives and consultants, to participate in discussion forums like Tactical Philanthropy.

But most importantly, we all need to embrace humility as a virtue, stop thinking we deserve immunity from criticism, and actively listen to those who have the courage to speak out on tough issues.

In the wake of the Japanese disaster, charity rating organization GiveWell is demonstrating how impact focused transparency can be effective for foundations.

Ever since the Japanese earthquake, GiveWell has be posting information for donors interested in making a donation in reaction to the disaster. See links here, here, here, here, here and here. The posts are in depth, highly informed analysis with actionable takeaways. The posts explore the complex nature of the disaster and look at the unique characteristics of the specific event rather than offering general disaster response advice.

GiveWell’s advice moves money. The money given to the charities they suggest through their website represents only a minority of the money they actually influence.

So here’s my question. Why is GiveWell, on an annual operating budget of $350,000 leading the way with this advice? According to GiveWell, they’ve assigned one staff person who has spent about 40 hours on this project. Yet their work has been highlighted in the New York Times.

It isn’t as if large foundations have not also analyzed the Japanese situation. The Gates Foundation, for instance, made a $1 million grant to Mercy Corps in response to the disaster. Why doesn’t Gates invest 40 hours from one staff member in explaining their rationale? GiveWell is baffled as well:

“The situation in Japan is confusing to donors, and the Gates Foundation is better positioned than individuals (and better positioned than we are) to sort through the confusions. If it posted a substantive explanation of its grant – and answers to the natural questions this grant raises – it could be a great help to individual donors, who have given over $161 million (U.S. donors only) to the relief effort.”

If the Gates Foundation produced the sort of public analysis that GiveWell has, I would guess that they would influence other donations that would total more than the $1 million that they gave. Certainly the New York Times article would have included their thinking on the topic.

My point is not to pick on the Gates Foundation. No major foundation to my knowledge consistently produces public information explaining the rationale behind their donations as a way to influence other donors and enhance the impact of the foundation. I’m not even aware of one instance in which a foundation has followed this strategy (please email me details if you know of an example). [Update: I meant any large, staffed foundation. I work with and am aware of a number of smaller foundations that utilize this strategy. But by virtue of their public presence, larger foundations have more opportunity for their ideas to reach other donors.]

The opportunity here is huge. Foundation giving makes up just 13% if US charitable giving. If you believe, as I would assume most foundations do, that their philanthropic knowledge is their key value rather than their raw capital, than the best way to leverage that value is by sharing it as a way of influencing more capital.

Having a lot of money doesn’t make you a great philanthropist nor a great investor. Knowing what to do with your money is the key to being a great philanthropist or great investor. Figuring out how to leverage your knowledge against the largest pool of capital possible is the key to being the best possible philanthropist or investor. Leveraging knowledge against the largest pool of capital possibly is exactly the approach Warren Buffett used to become the best possible investor he come become. Who is going to figure out how to apply this approach in philanthropy?

By Bob Ottenhoff

Over the years, GuideStar has taken on the monumental task of providing transparency into the nonprofit sector, with care to maintain a sense of neutrality, providing tools and data users can access to guide their decisions.

Now, we come to yet another crossroads in our history. Late last year we adopted a new strategic plan with an ambitious long term vision that embraces a world where:

• Information that supports quality decision-making flows through the sector at low cost for providers and users,
• Nonprofits know their performance, have tools to improve their performance, and are able to share their data freely and widely with donors at low cost
• Donors are positioned to target their giving to the organizations that best fit their giving preferences – impact or passion-driven
• Best fit nonprofits benefit from easier assessment of performance with higher donations from purposeful donors
• The marketplace shifts toward purposeful giving (vs. responsive), and the cost of fundraising and grantmaking decline

GuideStar’s acquisition of Philanthropedia and Social Actions combines entrepreneurial talent, new technologies and adds deeper, wider and better data to our information stream. We are excited about being able to achieve efficiencies and scale faster by engaging the talent and platforms already created by both these entities.

For some time, we have been looking for a way to utilize the in-depth analysis conducted by private foundations. Philanthropedia uses a sophisticated process and network to tap into the “wisdom of experts” to analyze the effectiveness of nonprofits working in a particular cause area. We currently capture some of this information and display it via our TakeAction platform. This year they have added nine more cause-areas, have approximately 200 organizations in the top tier recommended category, 1,400+ organizations with reviews from several experts and a new “start-up” category with profiles and an expert comment on why these 25 or so start-ups have high potential. Their 2011 goals include adding ten additional cause areas.

We plan to use GuideStar’s data and processing assets to enhance Philanthropedia’s research platform and to scale Philanthropedia’s mission. Their crowd-sourcing of experts, coupled with the Great Nonprofit reviews (“crowd-sourcing of users”) we have invested in at GuideStar over the last two years, will give us a comprehensive compilation of third-party nonprofit reviews. Philanthropedia is led by co-founder Deyan Vitanov, with a fulltime staff of two and a part-time staff of two overseas product development engineers. We’re looking to apply their entrepreneurial spirit and energy into major roles in building GuideStar Labs, developing GuideStar’s TakeAction as our online laboratory and strengthening our data sources and content partnerships.

As for Social Actions, we see GuideStar’s future tied to what Peter Dietz said in his blog recently: “The stewards of databases are no longer just asked to open up their datasets, but to make them available in such a way that they link with other data repositories by design.” This linkage is key to integrating data in a way that makes sense to different user groups. We have engaged Peter and Christine Egger to help us take their Social Actions concept to the next level. We built TakeAction with open source technology, for all the same reasons Social Actions built their platform on this same commonly accepted, scalable and rapid application technology. As a first step, we will integrate Social Actions into our TakeAction micro site and use it as part of our GuideStar Lab for testing out new tools and services.

Social Actions also provides a new layer of social innovators to our growing data network. We envision leveraging the online communities and resources that Social Actions brings, by weaving in their action-oriented resources into a user’s decision-making process. We believe development and adoption of a standard protocol that will simplify cross-platform communication among transaction providers will have huge strategic implications to the sector. We’ll also use Social Actions Open Action XML API and semantic web technology to expand our data sharing services.

Powered by these new acquisitions, we’ll be one step closer to turning data into information and knowledge and making GuideStar information widely distributed through a range of partners to all purposeful donors.

In 2007, New Profit launched America Forward, a bi-partisan effort to work with policymakers, legislators and other leaders to encourage the deployment of public and private resources towards supporting social innovation. It was America Forward that advanced the idea of the White House’s Office of Social Innovation and Civic Participation as well as the concept of the Social Innovation Fund, both of which have become a reality.

The Gathering will feature speakers from all sorts of backgrounds, but I’m intrigued to see that Steve Johnson is being given a prominent role.

Johnson is the author of Where Good Ideas Come From. I cited Johnson’s thinking in my post titled Philanthropy’s Period of Rapid Innovation. That post included the video below which does an excellent job of explaining the core idea of the book (note that this production style was used to similar effect by Bill Gates in conjunction with his recent annual letter).

(click here to view the video if you are reading this via email)

Johnson was also a speaker at a TED event in Oxford where he discussed some of his ideas in more depth.

(click here to view the video if you are reading this via email)

Johnson’s core argument is that good ideas do not spring forth from any one person or at any one time, but instead are the output of a dynamic process of refinement of other ideas and our own ideas. He points to evidence that periods of rapid innovation in various fields were supported by some sort of mechanism which assisted in the acceleration of idea exchange.

I believe that social media is acting as a platform for rapid idea exchange in the social sector. It is encouraging this rapid idea exchange that makes me advocate for transparency, for talking about failure, for the Social Innovation Fund to share all applications, and for foundation and other social sector blogs to embrace a conversational instead of a newsletter approach to blogging.

By Ian Thorpe

In the organization where I work, like in many other development organizations, there has been a lot of push over the past few years on “evidence-based” policies and programmes. So when I tell people I work on Knowledge Management, they often imagine that I’m working on strengthening academic research, or on building massive all-encompassing databases full of peer-reviewed scientific knowledge.

Although I am working on some databases – this isn’t what I actually do most of my time – nor despite what some of my professional colleagues think – is this what I think we should be doing.

Development is a complex business, if it weren’t we would have gotten further along in solving the world’s problems before now. One common reason cited as to why we haven’t done better is that we don’t have enough data, and we don’t have enough evidence.

A number of remedies are commonly proposed to help address this:

1. Collect more statistical data – more surveys, more administrative data collection. More recently we have started to say that we need more real time data collection.
2. More research – more academic studies, more randomized controlled tests, more papers published, papers published more quickly.
3. More evaluation – we need to more systematically evaluate more of our programmes to understood what worked and what didn’t and what lessons we can learn. We need to use better evaluation techniques.
4. More, bigger and more open databases – we often acknowledge that a lot of research has already been done or data collected, but that it is not easily available as it is stuck behind pay walls, fragmented and not well disseminated or easily searchable. To address this we strive to make big well-organized mega-databases that are the preeminent knowledge sources on their particular topic, and advocate for more free access to data and research.

Guess what – I actually agree that all these things are worthwhile. I mean how couldn’t I? BUT – too many people seem to believe that if we keep collecting more and more data, do more and more research and evaluations and make more and more comprehensive databases, then we will have everything we need to do evidence based development work. Basically, if we look hard enough, the truth is out there…

There are a couple of reasons why I don’t agree with this:

• There are limits to how much evidence you can collect
• There are other important dimensions to knowledge that are actionable, yet tend to get overlooked when we take too strong a focus on “evidence”

Firstly the limits of what knowledge you can collect. In developing county contexts in particular, it can be difficult and expensive to come by high quality, timely and relevant data. Existing data collection systems are often weak, and while they can be developed there are still limits in terms of accessibility of marginalized populations and cost of developing surveys to them to such an extent that they can provide the data needed to answer many of the development policy concerns we have.

Similarly for research, there are a large number of potential questions that we would like to address, but availability of data, costs, time and limitations in the research methods themselves mean that there are a lot of questions that can’t be answered in a sufficiently timely manner for the development of policies and development programmes.

Evaluation also is limited in that it can be very costly, yet only tell you part of what you need to know in terms of whether a programme was effective and why.

One particular challenge for any knowledge related work is that of generalizability. To what extent can the results of a study of evaluation be generalizable to other contexts and other timeframes and how much do they tell you about what you should do and what will work in the future.

Another important limitation of “evidence” is that even when it exists and is fairly clear (which for the reasons stated above frequently isn’t the case), it often isn’t sufficient to motivate policy makers, politicians, families etc. to take action. Any findings or recommendations also need to be contextualized to  the local culture and to the power relations of the situation where you are trying to use the evidence. People often choose to interpret evidence in a way which supports their current beliefs, are not necessarily going to use peer-review in a reputable journal as their benchmark on whether to trust the source, and may not accept advice they don’t like that they perceive may weaken their current influence or power.

None of this means that data, research and evaluation aren’t needed. But it does mean that they are not enough. So what’s missing?

An important aspect of knowledge transfer and change is personal relationships. Most people don’t have time or the skills to examine all the available evidence first hand. This means they rely on the opinion of others whom they trust. Similarly standard methods for collecting, storing  and disseminating research often have little impact with people being too busy to seek out the evidence they need, or to even develop the skills to do so. Again people frequently ask others rather than access the evidence directly themselves.

Also there is a whole range of knowledge that isn’t captured by research, that of personal experience. Often you can understand a situation, and describe it to share it with others, but you can’t back it up with scientific research (a trivial example is that I’m pretty sure I know the quickest way to walk to the station in the morning- but I have neither measured it nor timed it).  It might be that it would be too expensive and difficult to prove it through research, or that by the time you know the answer, it would already be too late. Some knowledge is in the form of skills or even instinct which doesn’t easily lend itself to being formally captured at all. This type of knowledge is known in the business as tacit knowledge. Here is a handy diagramme that explains the difference between the two (link to original).

So, in order to take advantage of the part of knowledge that lies below the surface (the part which isn’t “evidence” in the formal sense), then you need to take other approaches. These can involve using tools to try to capture some of what is currently hidden to make it more shareable (tools such as after action reports, end of assignments reports, self-reflection exercises, lessons learned, story telling etc.) and through approaches that make it easier for people with shared knowledge interests to find each other, trust each other, share with each other and collaborate (through approaches such as knowledge fairs, communities of practice, social networking, cocreation).

In fact I find that the most interesting, and promising work I do in the area of knowledge management is not about evidence at all – but is about the social dimension to knowledge. What I need to do is make a better case for this with my colleagues  – but then I’m sure they are going to ask me to show them the evidence!

While philanthropy focused blogs have exploded in number in the past few years, I’ve been struck by the fact that of the 32 blogs I list in my blogroll, not a single one is written by a foundation. While many foundations have launched blogs in recent years, they are almost uniformly newsletters about the foundation that are published on the web using blogging software.

The major exception was the short lived blog authored by Hewlett Foundation president Paul Brest for four months in late 2008 to early 2009. Paul’s posts immediately engaged the broader philanthropic blogosphere. His 16 posts commented on items authored by Nathaniel Whittemore of the Social Entrepreneurship blog, reviewed the book Philanthrocapitalism, engaged the elusive “Madmunk” blogger, discussed Michael Edward’s book Just Another Emperor, psychoanalyzed the motivations behind corporate philanthropy, offered a scathing critique of NCRP’s Criteria for Philanthropy, and engaged in a running debate with me on varying approaches to grantmaking.

Now we have an interesting new example of a major foundation blog engaging in this kind of conversational format and the author is none other than Melinda Gates.

Back in October, Mitch Nauffts of the Foundation Center who writes the Philantopic blog posed a series of questions to Mrs. Gates after he was disappointed with the line of questioning featured in a New York Times Q&A with her. Then, last week, Mrs. Gates (who frequently posts to the Gates Foundation blog) wrote:

“I’ve received a lot of comments about [the NY Times Q&A], but this post from the PhilanTopic blog stood out.

The author, Mitch Nauffts, responded to the piece with a list of his own. Then, he invited his readers to submit more. I appreciate the sentiment in Mr. Nauffts’ post, so I thought I’d answer a few of his questions.”

She then provided answers to questions about the current boom in philanthropy, whether the Gates Foundation has too much influence, and who she and her husband Bill talk with to stay grounded and seek wisdom.

In an email sent to Mitch, the Gates Foundation director of media relations said that Melinda’s post was “part of a larger effort by the foundation to be "more responsive online." With all the talk about the need for foundations to be more transparent, I think that this distinction between newsletter type blogs and conversational blogs is important.

The former is an example of an accountability approach to transparency. It seeks to reveal to the public more about the inner workings of the foundation, but probably does little to actually help the foundation improve.

The latter however, a conversational blog, is an example of impact focused transparency. Engaging with the world around you is key to constant development and improvement. In fact, one of Mitch’s questions was about how Melinda stays grounded and seeks wisdom. Her response was that she and Bill traveled a lot to visit beneficiaries and that this approach to staying in touch was “some of the most important time Bill and I spend working on behalf of the foundation.”

When I looked back on the Exploring the Edge concept I developed for finding Big Ideas, the reason I decided it didn’t work was because Big Ideas don’t come fully formed from one person. They don’t appear as a sort of newsletter-style notification of their existence. Instead, Big Ideas are developed through a process of conversation.

I showed this video about Steven Johnson’s book Where Good Ideas Come From:

(Click here to view video if you are reading this via email).

In the video Johnson argues that good ideas do not spring forth from any one person or at any one time, but instead are the output of a dynamic process of refinement of other ideas and our own ideas. The video also points to various periods of rapid innovation and says that each period was supported by some sort of mechanism which assisted in the acceleration of idea exchange.

I wonder if blogs, Twitter and the array of philanthropy focused online communication formats are laying the groundwork for philanthropy’s own period of rapid innovation. Our field doesn’t have a geographic focus like Silicon Valley, it doesn’t have a cultural focus point like the coffee houses of the Enlightenment.

When I think back on the history of this blog, I find that the first major catalyst that gave rise to the Tactical Philanthropy community and laid the basis for the dynamic conversations and debates we have here, was the Giving Carnival.

The Giving Carnival was an organized effort on my part to rope the small number of philanthropy blogs that wrote regularly in late 2006 and early 2007 into an ongoing conversation. At the time I had no idea of the ramifications of the process or the distinction between newsletter style blogs and conversational blogs. But I knew that the most interesting blog posts were those that debated, supported or refined the arguments made by other bloggers.

On a monthly basis, for the better part of a year, most of the major philanthropy blogs at the time would weigh in on a common issue. For me, it was a tremendous learning experience to see a number of smart people offer up varying views and unexpected takes on issues I was passionate about.

I know that I am personally the biggest beneficiary of this blog because I learn so much from the many readers who comment and email to challenge me, reinforce my thinking or offer up twists I hadn’t thought of.

I hope that Melinda felt that she got something out of Mitch’s questions the process of writing her response. I hope that she’ll wade back into the conversation again.

Social media and the push toward transparency is important in a number of different ways. But I think the most interesting ramification could be the development of a far more dynamic conversation about philanthropy that gives rise to our own period of rapid innovation.

“Thanks for the provocative commentary on the report Sean. We couldn’t agree with you more about the importance and power of leverage. In the coming years, we believe that the most effective funders will increasingly be able to leverage outsized impact and trigger resources that are far larger than their own, whether it’s by influencing other funders (institutional or individual), catalyzing government support, mobilizing public will and opinion, or stimulating markets to sustainably provide services…

But I wonder, though, whether the main distinction you are really highlighting is less about “internal” versus “external” leverage (many of the examples of Acting Bigger from our report—especially in the section on “Leveraging Others’ Resources”—are primarily about influencing the flow of external resources, after all), as much as it’s about “direct” and “indirect” impact.

And in that respect, your point remains a powerful one. In the end, the greatest impact of the Women Moving Millions campaign, for example, may not be in exactly how many dollars the initial gift ends up leveraging directly, but instead in how the effort raises awareness about women’s and girl’s issues and how it shifts the behaviors and attitudes of generations of women who are empowered and encouraged to give in the years to come.”

Gabriel makes a good point in questioning the internal/external vocabulary I used. My point in the post (and in the presentation I gave on Friday to the Social Venture Partners conference) was to suggest that the impact of a funder’s actions may be felt much more largely away from the targeted area intended by the funder.

In the post I wrote:

“I believe that in many cases, external leverage is FAR more powerful than internal leverage. But internal leverage is far more measurable. We can see this dynamic at work in Warren Buffett’s gift to the the Gates Foundation. The internal leverage (Buffett’s utilization of the Gates Foundation’s resources to distribute his giving) is significant. But as I’ve argued many times, the big impact of Buffett’s gift is the external leverage generated through the richest people in America modeling a changing attitude to philanthropy.”

Gabriel suggests that direct/indirect might be better than internal/external. I hesitate to use this vocabulary, because I think the “external”/”indirect” impact of Buffett’s gift, for example, is actually very direct. His actions are directly influencing the way Americans think about philanthropy. It may be difficult to measure and it may be difficult to control, but it is very real.

But Gabriel is right that internal/external isn’t very good either. Clearly a funder can leverage internal sources of leverage (non-monetary resources) or external sources (other fund flows). These actions can be directed towards precise, targeted activities or towards influencing larger spheres.

Regardless of what we call it, an important take away for me is that a real tension can exist between measuring impact and maximizing impact. The relationship between the two is neither completely correlated or negatively correlated. Often measuring impact can be a key tool for maximizing it. Yet I think it is important for philanthropy to grapple with the idea that those things which can be measured are not always the most important things. As we strive towards measuring impact, it is critical that we don’t end up thinking too small. Achieving measureable objectives while ignoring opportunities to create much larger impact simply because the larger impact isn’t measureable would be a tragedy of epic proportions.

Expertise on Demand has now officially launched. From the Philanthropedia website:

“Expertise on Demand is a new Philanthropedia service that acts as a trusted intermediary connecting major donors, philanthropy advisors, and foundations with experts who can help fill knowledge gaps quickly and efficiently and channel more money to high-impact nonprofits and projects.

Donors use this service by filling in a brief form with the question they would like to ask an expert. Philanthropedia then searches its database of thousands of experts to find a good match, ultimately connecting the donor with the expert via a phone call.

The Process

1. Submit your question

Have a question about which nonprofit to support or how you can plan your giving strategy? Submit a question related to your philanthropic goals here, and we will try to find an expert who matches your needs!

2. We find an expert match for you

We will try to match an expert who meets your needs by searching through our database of over 1400 experts with an average of 17 years of experience. View our experts here.

3. Expert confirms

We will contact the best-fit expert to answer your question.

4. Connect with expert over phone

We will schedule a 30 minute phone call at a time that works for both of you. We ask both the expert and the user to fill out a short evaluation form after the conversation so we can improve our service.”

I’m very excited about the project’s potential to accelerate the flow of impact oriented information. Experts are well positioned to give donors the context they need to make smart decisions. Experts know the “story” behind what is happening in the field, the personalities involved and the relevant history.

Too often, when we talk about information we think about discrete bits of data. But people who are experts, whether they are academic researchers, nonprofit executives, foundation program officers or your brother-in-law who knows everything there is to know about baseball, are able to provide rich, contextual information that is often far more valuable then the collection of data points you might gather on your own.

My hope for Expertise on Demand is that funders and individual donors will turn to the service as a quick way to access the sort of information you can’t find on Google. Expertise on Demand is a way to connect with the right people instead of simply the right data.

Expertise on Demand is currently free. I do hope you’ll consider giving the service a try the next time you are working to learn more about a social sector issue.

In addition to Expertise on Demand, Philanthropedia has recently launched multiple new cause areas and significantly upgraded the information they provide about the nonprofits they rate. They have now expanded to cover:

International Causes

• Microfinance

National Causes

• Arts & Culture
• Childhood Nutrition/Health
• Climate Change
• Education
• Reproductive Health, Rights, & Justice
• Workforce Development

Bay Area Causes

• Arts & Culture
• Climate Change
• Early Childhood Education
• Homelessness
• Middle-Secondary Education

Nonprofit profiles of their top rated nonprofits now include expert commentary on each organization’s strengths and areas for improvement, commentary from the nonprofit, bios of the leadership team, stories about the nonprofits beneficiaries, and detailed information about the experts involved including names, bios and information about who was invited to participate and who accepted.

At a speech yesterday about transparency for grantmakers, I pointed out that Philanthropedia represented not only a low cost, high quality source of information, but also a low cost, high quality solution for grantmakers to share what they know in an effort to increase impact.

If you are interested in joining Philanthropedia’s network of experts, you can learn more here.

Anne Fadiman
The Spirit Catches You and You Fall Down

Today I’m happy to announce the re-launch of my Audacious Ideas series under the name Exploring the Edge (see my post on the redesign). The series will profile ideas from around the social sector that push boundaries, challenge conventional wisdom and otherwise explore the edge between what is and what might be.

Exploring the Edge will accept entries from anyone. All entries will be considered by the Exploring the Edge review committee (see the rather fantastic people I’ve recruited below). To qualify for review, entries must be no longer than 700 words. Each entry should begin with the question “How might we…?” in which the author completes the question and then uses the body of their essay to answer the question. For instance, a entry might begin, “How might we encourage individual donors to base their donations on evidence of what works?” or “How might we attract the very best new college graduates to the nonprofit sector?” with the rest of the essay exploring and answering this question.

We are shooting for quality, not quantity in this series. The review committee is focused on approving only those entries which offer a truly differentiated point of view and provide an intriguing answer to their “How might we…” question. The “How might we…” format is inspired by the IDEO approach to brainstorming.

Importantly, I will not be a member of the review committee. Instead, I will act as the curator of the series and the liaison between entry authors and the review committee.

Now that the sleepy summer months have come to a close, I’m excited to get rolling on this new series. To submit an entry, simply email it to me at Sean@TacticalPhilanthropy.com. Feel free to contact me to discuss your concept before writing it if you like.

Exploring the Edge Review Committee

  Cheryl Dorsey, Echoing Green
Cheryl is president of Echoing Green, which makes investments in social entrepreneurs. She is a multiyear member of the Nonprofit Times Power & Influence Top 50 and in 2009 was named by US News & World Report one of America’s Best Leaders. She is Vice-Chair of the President’s Commission on White House Fellowships, after serving as a team member of the Innovation and Civil Society subgroup of the Obama Presidential Transition’s Technology, Innovation, and Government Reform Policy Working Group.

Robert Egger, DC Central Kitchen
Robert is the Founder and President of the DC Central Kitchen, which distributes meals and runs a nationally recognized culinary arts job training program for unemployed men and women. Robert is a multiyear member of the Nonprofit Times Power & Influence Top 50 and is the author of Begging for Change: The Dollars and Sense of Making Nonprofits Responsive, Efficient and Rewarding For All. He has also been named an Oprah Angel and a Point of Light.

  Beth Kanter, Zoetica
Beth is the author of Beth’s Blog, one of the longest running and most popular blogs for nonprofits and co-author of the highly acclaimed book, The Networked Nonprofit. She is the CEO of Zoetica, a company that serves nonprofits and socially conscious companies with top-tier, online marketing services.  In 2009, she was named by Fast Company Magazine as one of the most influential women in technology and one of Business Week’s “Voices of Innovation for Social Media.”

  Paul Tarini, Robert Wood Johnson Foundation
Paul is the team leader for the Foundation’s Pioneer Portfolio, which actively seeks innovative projects that can lead to fundamental breakthroughs in health and health care. Paul believes that Pioneer has “both an opportunity and an obligation to challenge the way we look at the future of health care in this nation.” Because the team is dedicated to thinking and talking about new ideas and groundbreaking approaches, including those from nontraditional sources and fields, he says Pioneer enables the Foundation to make conceptual leaps and take risks in grantmaking that would otherwise not be possible.

  Jocelyn Wyatt, IDEO
Jocelyn leads IDEO’s Social Innovation domain, which she has expanded over the past several years. In her work, she builds social enterprises and advises businesses in the developing world, using the market to create social change. She has lent her perspective to social-impact projects with clients such as Acumen Fund, the Bill and Melinda Gates Foundation, Kickstart, and the Rockefeller Foundation.

Replication vs. Diffusion: Does scaling social impact require scaling organizations?
A successful for-profit organization must maintain ownership of its concept while it scales in order to capture profit. But social impact accrues to the public, not the firm that owns the process that generates the impact. How should social enterprises weigh the tradeoffs between scaling their organization or scaling impact through sharing their process with others? Learn about two organizations that have successfully scaled using entirely different approaches (this session is still subject to change).

Today, I saw an interesting example of a "diffusion” strategy of scaling impact. New Philanthropy Capital, a nonprofit analysis firm in the UK which is itself a nonprofit, announced the launch of PHINEO, a new nonprofit analysis firm in Germany.

From the post:

“NPC is excited about the arrival of PHINEO, and also a little proud. As of Monday, Phineo’s team of 17 will research social problems in Germany as well as analysing charities trying to tackle them, to find those that have a large impact on the lives of beneficiaries. For this work, PHINEO has carefully adapted NPC’s charity analysis methodology for the German market, and has developed a three-staged charity analysis process…

NPC and PHINEO share a commitment to effectiveness, impact-driven funding, and the creation of public knowledge. We also believe that collaboration is essential to build the case for effectiveness and hope more and more similar organisations will spring up around the globe so we can learn from each other. We’re looking forward to following PHINEO’s progress—watch this space for regular updates.”

So NPC has essentially worked to create their own competition. This is not a one-off event. From my discussions with NPC, sharing their methodology with startups is a systematic part of their process.

This strategy would be insane for a for-profit company. As we note in the description of our SoCap panel, “a successful for-profit organization must maintain ownership of its concept while it scales in order to capture profit. But social impact accrues to the public, not the firm that owns the process that generates the impact.” This means that NPC can legitimately “claim” the impact generated by groups like PHINEO who they help get started. By sharing their knowledge, they are scaling their impact.

This approach is quite different from the more traditional approach to scaling, which generally refers to growing an organization so that it serves more people. The fact that social impact accrues to the public while profit only accrues to a single organization creates a striking difference between effective social sector strategies and for-profit strategies.

Bravo to New Philanthropy Capital for getting that their success should be measured by the degree to which they help drive “effectiveness, impact-driven funding, and the creation of public knowledge” instead of by the growth of their own organization.

Philanthropedia’s CEO Deyan Vitanova released the following statement on their blog today:

“I am very excited to announce a new Philanthropedia initiative called Expertise on Demand. This new service will act as a trusted intermediary and connect major donors, philanthropy advisors, and foundations with cause experts who can help fill knowledge gaps quickly and efficiently and channel more money to high-impact nonprofits and projects.

Expertise on Demand is very much a natural extension of Philanthropedia’s existing concept of building expert networks to identify high-impact nonprofits in different social causes. While Philanthropedia currently focuses on providing Expert Funds of recommended nonprofits, we recognize that our 1000-strong expert network may be of value to major donors who wish to dig deeper into an issue area and make a larger financial contribution. That is why we decided to create Expertise on Demand which further promotes Philanthropedia’s mission of knowledge sharing and strategic giving.

To make Expertise on Demand a reality, we are collaborating with Tactical Philanthropy Advisors, a philanthropy advisory firm. Tactical Philanthropy’s CEO Sean Stannard-Stockton is a well-known thought leader in philanthropy who envisioned the Expertise on Demand concept last year when he announced his intention to launch a similar project under the name “Tactical Philanthropy Knowledge Network.” At the time, Philanthropedia was just getting started, but as our organization has developed, Sean and I decided that Philanthropedia was the best home for this initiative because we had already built networks of more than 1000 experts through our own research.

We asked Sean to weigh in on why he thinks Expertise on Demand is so important:

“I think a key problem to solve in philanthropy is how to allow sharing of knowledge while protecting access to individuals and respecting their time and privacy. After the Haitian Earthquake, 45% of Americans made donations to support the country. Yet despite numerous foundation professionals, academic researchers and nonprofit senior staff who have deep knowledge about who is doing the best work in Haiti, few if any donors were able to capitalize on this knowledge.

Philanthropedia has quickly established itself as a leading creator of expert networks in the social sector. My hope is that the Expertise on Demand platform can build the trust necessary to facilitate open knowledge sharing while protecting individual experts.”

Sean has agreed to join Expertise on Demand as chair of the steering committee tasked with designing the service. Other members of the committee are:

• Glen Galaich, Director, Philanthropy Workshop West
• Katherina Rosqueta, Executive Director, Center for High Impact Philanthropy at University of Pennsylvania
• Lisa Rose, Donor Relations Officer, San Francisco Foundation
• Nick Hodges, COO, Schwab Charitable
• Robert Egger, Founder and President, DC Central Kitchen

The goal of the steering committee will be to help design Expertise on Demand over the next few months, before the official beta launch of the service to coincide with the Social Capital Markets conference in October.

If you are a major donor, philanthropic advisor, or foundation that wants to tap into the Expertise on Demand expert network, please send us an email at eod@myphilanthropedia.org indicating the issue area that you are interested in.

If you are an expert who wants to join the 1000+ strong Philanthropedia expert network, please send us an email at eod@myphilanthropedia.org with your name, areas of expertise, contact details, bio, and photo.

You can find more information, including answers to frequently asked questions, at http://www.myphilanthropedia.org/eod or by emailing us at eod@myphilanthropedia.org.”

I look forward to working with Philanthropedia and the members of the Expertise on Demand steering committee to make our shared vision a reality. I believe that making systematic knowledge sharing in the philanthropy sector the status quo offers one of the very biggest opportunities to enhance impact through out our field.

In my recent interview with Paul Carttar, the director of the Social Innovation Fund, Paul said that “The goal of the Fund is not just to fund great organizations. What this is really all about is changing how capital is allocated in the philanthropic sector.” He also stressed the importance of the “learning communities” that the Serve America Act calls on the Fund to create to help spur the creation of a marketplace to connect smart funders and great nonprofits. Scaling What Works is exciting because it is the first independent project that I’m aware of that will attempt to leverage the attention being paid to the Fund to encourage more support for providing growth capital to effective nonprofits.

The program is being funded by 21 of the highest profile funders in the country (see full list here). While some of the funders have already been involved publicly in the Social Innovation Fund, many of the organizations have not made public comments of supports and so their involvement in this project is hugely validating for the Social Innovation Fund model.

The objectives of Scaling What Works include:

• Serve as an intermediary and information broker between the field of philanthropy and the public agencies involved with the Social Innovation Fund.
• Expand the number of donors nationally who are prepared to support the evidence base, capacity and growth of promising nonprofit organizations.
• Support collaboration and knowledge sharing among the network of intermediaries being funded by the Social Innovation Fund so they can most effectively invest their resources and importantly “so the lessons they learn are translated for the broader field.”

The Social Innovation Fund’s $50 million in annual grantmaking only represents 0.017% of annual charitable giving. But then the annual grantmaking of the Gates Foundation, the biggest foundation in the world, only represents 1% of annual charitable giving. That means that any philanthropic project that hopes to have systematic impact must incorporate strategies for leveraging or influencing outside financial resources.

I think Grantmakers for Effective Organizations understands this concept perfectly and their president Kathleen Enright confirmed as much when she told me via email, “Scaling What Works holds the potential to contribute to the overall capacity and effectiveness of hundreds of grantmakers and thousands of nonprofits far beyond those directly involved in the Social Innovation Fund.”

In other words, Scaling What Works is about extending the reach of the Social Innovation Fund so that the impact of its $50 million in grants reverberates far beyond the circle of organizations that receive direct support from the Fund.

However, for some time GuideStar has been looking at ways to offer visitors more evaluative information. Now, they’ve launched TakeAction @ GuideStar.

Click here to visit the new website.

The site seeks to help donors select which nonprofits to fund, objectively making available rating information from GiveWell, GreatNonprofits, Philanthropedia and RootCause.

One interesting aspect of the new platform is that it reorients the way in which users seek information. GuideStar, like many nonprofit databases, has traditionally assumed that users are looking for information about a specific nonprofit. Their search interface prompts people to enter an organization name. This format makes sense if we assume that users are checking to see if an organization is compliant and has no red flags. But if a donor is seeking the best organization, they need to search by cause area since they presumably do not already know the organization they are looking for. The TakeAction platform reorganizes the GuideStar database by cause area.

One more step towards helping donors make smart decisions about their giving, even if it doesn’t quite turn GuideStar into “the one platform to rule them all”.

For background, I highly recommend reading Monitor’s new, still in draft format, report titled Cultivating Change in Philanthropy.

Ideas that came out of the meeting, either from Monitor or workshop participants:

• In thinking about predicting the future, Monitor Institute’s Katherine Fulton reminded us of Paul Saffo’s quote: “Never mistake a clear view for a short distance.”
• It was observed that many new forms of social impact activity, such as crisis information crowdsourcing group Ushahidi, were simply unimaginable ten years ago.
• Philanthropy needs to get comfortable with “creative tensions”. It is not “innovation or effectiveness”, it is how can we balance the internal tension between these two goals and many other competing priorities.
• “Guerilla Philanthropy” was suggested as a way to think of the many new social impact efforts operating outside of institutional philanthropy. It was observed that the emergence of guerilla warfare dramatically upended thinking within established armies and that something similar may be happening in philanthropy.
• One of Monitor’s recommendations to increase impact was to “act bigger” by “understanding your ecosystem”. The concept of Ambient Intimacy, which I wrote about here, was proposed as one key to understanding your ecosystem.
• In examining the role of sharing failure within the field as a way to increase knowledge and therefore impact, it was proposed that “It is a failure of compassion to not share failure.”
• While much of the field is struggling with assessing impact, maybe we should be more focused on assuring impact. Whereas the first is a passive observing activity, the latter is an active, interventionist activity.
• The phrase “punching above your weight”, which means for a boxer to fight successfully against larger opponents, was used to describe the value of funders using non-monetary tools to enhance their impact (watch for my next Chronicle of Philanthropy column on the importance of these types of strategies).
• In another conversation about knowledge sharing within the sector, it was suggested that projects like Glasspockets.org could create a culture of “competitive sharing”.
• The afternoon consisted of a rapid prototyping of philanthropic programs that could help address some of the issues raised during the workshop. My group ended up winning the group’s vote for best prototype, which I’ll tell you about tomorrow.

A Philanthropic Network Passes On Recommendations of Worthy Charities
March 7, 2010 | Chronicle of Philanthropy

In all the talk about measuring results in philanthropy and how best to determine which nonprofit groups are effective, a simple fact is often overlooked. All across the country, foundation program officers, senior nonprofit staff members, and academic researchers know which nonprofit groups are doing great work.

Now a new group called Philanthropedia is working to capture this knowledge about top nonprofit groups and make it available to everyone.

This sort of information, personal recommendations from people in a good position to pass judgment, is a fundamental process that people use to make decisions.

Getting recommendations from experts can mean asking your friend who loves to eat out what she thinks about the new restaurant in town or consulting a book review in The New York Times before choosing your next novel. Recommendations from trusted experts are so valuable that we often pay large amounts of money to gain access to them before making critical investment, legal, or medical decisions.

Philanthropy itself is largely built on recommendations. Studies show that one of the main reasons donors give to certain groups is that a friend asked them to do so.

When those friends are fellow supporters of organizations and not professional fund raisers, they are in effect recommending a group that deserves support. But while those sorts of recommendations motivate action, they are not unbiased or delivered by an expert.

Philanthropedia is working to make expert recommendations of nonprofit groups as accessible as the expert recommendations that help shape our decision making about which movies to see, restaurants to patronize, or retirement strategies to deploy.

Working with a quickly expanding network of experts that includes grant makers, nonprofit staff members, scholars, and other experts, Philanthropedia is making available expert recommendations on topics that include organizations working to curb climate change, improve education, extend small loans to struggling entrepreneurs abroad, and reduce homelessness in the San Francisco Bay area.

Co-founded by Howard Bornstein, a former employee of the Bill & Melinda Gates Foundation, and Deyan Vitanov, an entrepreneur who had previously built an online community for computer programmers, Philanthropedia began operations last year with extensive support from the William and Flora Hewlett Foundation.

The Philanthropedia team uses a survey methodology similar to one developed by the RAND Corporation to use expert recommendations in situations involving a large degree of uncertainty.

Given the nonprofit world’s current inability to systematically measure the effectiveness of nonprofit programs or even agree on what attributes make for a well-run organization, Philanthropedia’s approach makes a lot of sense.

The big weakness in Philanthropedia’s model is that the recommendations it offers are only as valid as the expertise of the organization’s network.

Because so much of philanthropy is not based on evidence, it is quite possible that the nonprofit groups recommended by the organization’s experts are not truly the most effective ones. It could be that the people in the network have biases that produced flawed ideas about what makes a nonprofit group successful.

However, in a recent background paper, Philanthropedia showed that the nonprofit groups it recommends have little in common based on how much money they raise, how well known they are, and their age, number of employees, and accountability ratings from Charity Navigator.

This means that the experts are picking up on something else. Given that the experts are foundation employees whose job it is to analyze nonprofit groups, researchers who have spent years studying conservation, education, poverty, and other topics, and nonprofit senior staff members who see firsthand the activities of their peers, it seems likely that many of the groups Philanthropedia recommends are among the best.

In the wake of the Haitian earthquake, the Gates foundation, the Ford Foundation, the charity research group GiveWell, the University of Pennsylvania’s Center for High Impact Philanthropy, and the nonprofit Acumen Fund all made grants or offered recommendations of which organizations were in the best position to help.

Each of them listed Partners in Health as one of their choices. While this fact does not guarantee that Partners in Health is the most effective nonprofit organization working in Haiti, it does offer a useful piece of information for donors trying to decide what groups to support.

Philanthropedia offers the potential to gather this sort of information for different causes and to offer recommendations that are international, national, or local in scope.

What is fascinating about Philanthropedia is that its process is not only effective but it is also inexpensive to run and easy to expand.

Other organizations working to identify outstanding nonprofit groups by conducting original research may offer some advantages compared with Philanthropedia.

But Philanthropedia’s system allows it to analyze far more nonprofit groups by simply bringing to light what experts already know.

Philanthropedia could quickly become a great way for donors to learn from the people in the best position to know which organizations are the most effective.

Sean Stannard-Stockton is chief executive of Tactical Philanthropy Advisors in Burlingame, Calif., and author of the Tactical Philanthropy blog. He is a regular columnist for The Chronicle of Philanthropy.